The trial over OpenAI’s nonprofit transformation has reached a critical point as jury deliberations are set to begin. Elon Musk, one of the key figures, was absent for the closing arguments due to his participation in a foreign delegation in Beijing. The case has drawn significant attention because it questions whether converting a charity into a profit-driven company breached legal agreements made with early donors.

Background of the Legal Dispute

The lawsuit started in late April and centers on two main claims. Musk argues that OpenAI’s 2025 recapitalization broke the original charitable trust under which he donated around $38 million between 2015 and 2017. The move changed OpenAI from a nonprofit into a capped-profit company valued at hundreds of billions of dollars.

The other side claims that OpenAI’s leadership, including Sam Altman and Greg Brockman, did not breach any legal obligations. They also say the recapitalization followed proper legal procedures approved by California regulators. Microsoft, an investor, is also involved as a co-defendant, accused of aiding in the process that Musk believes unfairly enriched the company’s executives.

Key Evidence and Arguments

A notable piece of evidence presented was Greg Brockman’s 2017 personal journal, which described OpenAI’s nonprofit status as “a lie,” according to Musk’s team. Musk is seeking up to $134 billion in disgorgement, arguing that the money should be returned to the original nonprofit foundation. He also wants to remove Altman and Brockman from their roles and unwind the recapitalization.

The defense counters that there were no enforceable commitments made to Musk regarding the company’s structure. They emphasize that the donations were used as intended for research and that the legal process for the recapitalization was properly followed. Microsoft’s legal team highlighted that their $13 billion investment was crucial to keeping OpenAI afloat and advancing its AI projects.

The Legal Process and Potential Outcomes

The jury’s role is advisory, meaning the judge will make the final decision on remedies. The trial is divided into two phases: first, the jury determines liability, and later, the judge will decide what actions, if any, are to be taken, such as disgorgement or unwinding the recapitalization. Even if the jury finds Musk’s claims valid, it does not automatically remove Altman from his position.

Experts believe the case could set a precedent for how charities can or cannot transition into profit-making entities. Both sides agree that the outcome will influence the governance of AI labs that started as nonprofits but have become some of the most valuable private companies. The verdict will likely be announced later this year, with the remedies phase following afterward.

As the deliberations begin, the case remains one of the most significant legal battles involving major Silicon Valley figures and the future regulatory landscape of AI companies. The outcome could reshape how tech startups and nonprofits handle structural changes and donor agreements in the years to come.

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